Government Raids Contractor

In one of my first posts on this blog, I said “the government customer is still the one customer that has its own cadre of policemen and is quite willing to send them after vendors whom they find annoying.” (http://wp.me/piEZm-3) Now, undoubtedly to provide an updated confirmation of my platitude, the FBI and IRS CID have raided the offices of a government contractor in Meriden, Connecticut. (http://tinyurl.com/66p2g7w) The contractor was involved in $3.3 billion in military housing contracts with the U.S. Navy in the Pacific Northwest for more than 600 homes; with the U.S. Air Force at bases in Florida, Georgia, Arkansas and Massachusetts, and at a U.S. Army base in Missouri.. Every one of these projects collapsed with deadlines missed and subcontractors suing for payment. Although, as I know from personal experience, the military services aren’t very well staffed to manage the development of privately owned military housing, eventually the compounding contracting disasters brought so much attention that the contractor obviously came to the attention of those government agents who carry guns and they swooped in and carted off boxes of document and computers.

The poor attorney who apparently has been representing the company in its negotiations with the government was not aware of the raid when contacted by a reporter. Naturally, the reporter didn’t hear from the attorney again. I only hope he had learned the rule of legal representation that I was taught while an in-house attorney with GE: the lawyer never goes to jail. Which is to say, advise the client, but don’t participate in the conspiracy.

While this is perhaps an extreme example of a government contract (and possibly a government contractor) gone bad, it is good to remember that for the government contracting officer, the agents with guns are only a phone call away. To be successful in this business, government contractors must have both knowledge and integrity. Either one without the other is a good recipe for one of these surprise visits.

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